Looming economic storm threatens vulnerable citizens

Storm clouds are threatening economic growth in Ontario and Canada. On Wednesday, the central bank held interest rates amid slowing growth and fears of a major slowdown as early as 2020. The oil price crisis is hurting more than just Alberta’s economy. Ontario’s manufacturing sector has suffered a setback with news of GM’s Oshawa pullout. Other automakers are similarly pinched and more job losses are widely expected. Growth forecasts for 2019 have already been reduced.

Against this worrisome backdrop, consider these recent reports.

The number of Ontario seniors needing to use food banks jumped an alarming 10 per cent last year. And that’s not just because more people have achieved senior citizen status. That’s a growth rate three times faster than the growth of the province’s senior population, according to the authors of the report, the Ontario Association of Food Banks. A half-million Ontarians rely on food banks. The growth trend is expected to continue.

There are a host of “why’s.” Let’s look at a few. The changing workforce in Ontario features a rise in parttime jobs, contract work and precarious employment. More and more people are having trouble and living below the poverty line.

But according to the report, housing costs are the single biggest driver of the crisis. It states that nearly 90 per cent of food bank users are rental or social housing tenants, and they spend the majority of their inadequate monthly income on housing. OAFB chair Michael Maidment says: “If rent consumes as much as 70 per cent of your income, there’s little left over for anything else, like transit or food or even things like raising kids ...”

Adding to this, the provincial government has removed rent controls on some kinds of rental units, meaning prices will continue to rise.

If all this isn’t worrisome enough, consider food prices. Canada’s Food Price Report 2019 predicts an increase overall of about 3.5 per cent. Bakery, dairy, fruit and vegetables are forecast to get between three and six per cent more expensive. The average family grocery bill will grow by $400 next year.

For many of us, that’s an inconvenience. For low income citizens, it’s much more. Consider the single social assistance recipient, receiving a little above $700 monthly, probably paying more than 70 per cent of that on housing. Or the single senior receiving the Old Age Security of $586 monthly. Or the CPP recipient getting the average of about $630, which when combined with OAS offers up about $1,200.

For these folks, an extra $400 for food is not a minor glitch. It’s a potential disaster.

Governments can do something to mitigate these combined threats. They can expedite funding and policy around affordable housing. They can finally implement evidence-based rates for social assistance so they reflect the real cost of living. A national pharmacare program could make a huge difference. The federal government could pick up the Basic Income Pilot project killed by Ontario.

The point is, there are opportunities to prepare for the storm pretty much everyone agrees is coming. Will we seize them, or sit back and wait?

The average family grocery bill will grow by $400 next year. For many of us, that’s an inconvenience. For low income citizens, it’s much more. It’s a potential disaster.